Local Authorities have embraced Government of Malawi’s direction to fully implement the International Public Sector Accounting Standards (IPSAS) accrual-based accounting from cash based accounting.
In a statement during regional trainings to orient Local Councils to the new system, National Local Government Finance Committee (NLGFC) Director of Finance Kondwani Santhe said it was encouraging to note that councils have embraced the more efficient and effective system.
‘Malawi has developed a 4 staged implementation approach to full IPSAS accrual and the plan is that by year 2026, all Government Ministries, Departments and Agencies (MDAs) including Local Authorities (Councils) prepare their financial statements on full accrual’, says Santhe.
Santhe says this follows guidance from the Accountant General that all MDAs comply with IPSAS accrual stage 2 as a minimum requirement as well as in the 2019/2020 financial statements preparations.
‘Looking at the enormous work and the quasi-organisational nature of Local Councils coupled with various financial obligations and the need for more financial disclosures, reporting and presentation, Local Authorities will now henceforth, prepare financial statements on IPSAS accrual stage 3,’ Santhe says.
In his presentation at one of the training sessions, Chief Auditor at the National Audit Office Wachawaseme Mwale said the NLGFC facilitated trainings for Directors of Finance/ Chief Accountants and other accounting personnel from all Local Authorities across Malawi was a huge step towards orienting them on the preparation of financial statements for 2019/2020 on IPSAS accrual stage 3.
‘it will improve accountability and transparency (greater detail and increased disclosure in financial statements) with more credible, reliable financial reports which meet international standards and enhance harmonization, standardisation, comparability and consistency (within public entities and councils, with other international organizations, and over time) says Mwale.
In her remarks, Chairperson of Finance Managers Network (Local Authorities), Ellen Kaira Mwale, who is also Director of Finance (DOF) at Mulanje District Council said, ‘the training will dramatically improve local councils financial reporting and other capabilities following harmonisation, standardisation and migration of accounting processes from the IPSAS cash to IPSAS accrual stage 3’.
Kaira Mwale, commended the NLGFC for taking the council officers through the process, ‘It is a new system and is easy to follow, easy to audit and increases transparency, reporting and accountability’, Mwale says.
‘If a council fails to provide financial statements by 31st October, this year, it shall be an individual officer’s inefficiencies’, Mwale says.
Kaira Mwale says council accounting staff are appreciative as the trainings were aligned to the new year and councils have been given all they would require to be current and effective in their financial reporting.
Speaking during the Blantyre training NLGFC’s Financial Analyst, Dalitso Mainjeni said the orientation would enhance standardisation and reporting by councils so that there is comparability in council performances and timely generation of transactions.
IPSAS accrual reporting complies with Section 13 of the Public Finance Management Act while IFAC encourages Governments and Public Enterprises to use International Public Sector Accounting Standards (IPSAS).
